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This is all part of Sailer’s Rule of Unions that unions are strongest for the guys who seemingly need them the least: baseball players, Chicago Symphony musicians, and so forth.

The Port of Los Angeles/Long Beach represents an enormous fixed investment that can’t be easily replaced anywhere (although the government of Mexico has been trying to build a competitor for many years now, and the government of Panama is expanding the Canal to siphon off business). Therefore, the Harbor generates huge amounts of wealth and the various parties involved clash over how to divvy it up. The dockworkers are a tough bunch and when they are not happy, unfortunate things seem to happen. When the workers are unhappy you should probably, you know, watch your step, because accidents can happen. Thus, they get paid well.

Look for … the Union label….

Public sympathies have turned very anti-union over my lifetime. In fact, I’m not sure they were ever all that pro-union. Strikes are extremely agitating for 3rd parties, partly because they happen on the strikers’ schedule, not the bystanders. Presumably, the dock clerks picked the Christmas Rush for a strike precisely because so many businesses across the country are desperate to get deliveries before December 24.

Similarly, if you own a business, you don’t want to be in a perfectly competitive market, either. You want to figure out a way to grab a little bit of monopoly power. You want to be Apple not Dell, Microsoft not Digital Resources, Carlos Slim not some unconnected telecom entrepreneur.

I know they teach you all about the wonders of perfectly competitive markets in Econ 101, but, you know what? You don’t want to be stuck competing in a perfectly competitive market. You want to be well set up in a defensible corner where you aren’t facing perfect competition.

This entry was posted on Saturday, December 1st, 2012 at 08:36 and is filed under Dystopia Watch.
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